India may surpass China in attracting FDI: Nomura

According to Nomura, the trend of rising inflows to India and moderating inflows to China began in 2013 and FDI inflows to India can surpass those into China this year. According to the Japanese financial services firm, the trend of rising inflows to India and moderating inflows to China began in 2013 and FDI inflows to India can surpass those into China this year. FDI inflows to India are picking up. They rose from 1.7 per cent of GDP in 2014 to 2.1 per cent in 2015, narrowing the gap with China (2.3 per cent of GDP in 2015).

  • These trends of rising inflows to India and moderating inflows to China are likely driven by a mix of pull and push factors, such as divergent growth outlooks, ongoing FDI liberalisation/economic reforms in India and rising labour costs in China.
  • Rising FDI inflows not only provide a stable source of financing the current account deficit, they also bring in technical know-how, which can boost India’s productivity growth in coming years.
  • Foreign Direct Investment into India touched the “highest ever” mark of $51 billion during April-February period of last fiscal ended March 31.
  • In fiscal year 2011-12, India had attracted FDI worth $46.55 billion. In financial year 2014-15, it was $44.29 billion. This FDI includes equity, re-invested earnings and other capital.

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Vignesh

Vignesh Sathyan is the Founder of Day Today GK, a portal that helps Aspirants who are preparing for Competitive Exams.

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